DEPARTMENT OF COMMERCE JINNAH UNIVERSITY FOR WOMEN BS FINAL YEAR, FIRST SEMISTER 2010
“Not Just Soap, Its Skin Care".
SUBMITTED TO: MISS JAVAHIR
SUBMITTED BY: NIDA ATHER
DATE OF SUBMISSION: 2-FEB-10
Lux soap was first launched in the UK in 1899 as a flaked version of Sunlight soap. Subsequently it was launched in the US in 1916, and marketed as a laundry soap targeted specifically at 'delicates'. Lever Brothers encouraged women to home launder their clothes without fear of satins and silks being turned yellow by harsh lyes that were often used in soaps at the time. The flake-type soap allowed the manufacturer some leeway from lye because it did not need to be shaped into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that dissolved more readily and was advertised as suitable for home laundry use. Lux is currently a product of Unilever. The name "Lux" was chosen as the Latin word for "light" and because it was suggestive of "luxury”. In Pakistan Lux was first introduced in 1957 and till now Lux has become one of the top soap in Pakistan.
The market share of the company in the beauty soap industry is somewhere around 52%.Since in the beauty soap industry all products are of same price Unilever cannot provide its consumers with better price but it is in a great position in reference with its packaging, fragrances and product designing. It states that though in comparison to its competitors the pricing of LUX is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for LUX, for which it the market leader in the industry. The beauty soap industry in Pakistan consists of only seven major producers. Unilever Pakistan Ltd is operating in the industry with its world famous brand LUX. Out of these giant companies Unilever Pakistan Ltd is the market leader with a share of around 43%.
Others. 24% LUX 43% Rexona 9% Dove 11% Capri 13%
Figure shows the market share of all the companies in the sector. Unilever Pakistan Ltd is leading the market. The other competitors are very competitive among themselves but they cannot put a intense competition with Unilever Pakistan Ltd, as they have market share much less than Unilever Pakistan Ltd.
LUX is the highest selling beauty soap in Pakistan, it does not go for traditional mass marketing. Moreover as a beauty soap LUX does not even segment its market according to gender. Unilever Pakistan Ltd. segments their market according to geographical areas. The population of the country is segmented into three parts which are urban, sub urban and rural area consumers.
The company further differentiate the geographical segments according to Socio Economic Cluster (SEC) i.e. education and Income.
A High Income Income High Level of Education Education
Socio Economic Clusters B C Upper Mid Middle Level Income Educated Slightly Less than Cluster A Level Income Educated Slightly Less than Cluster B
D Lower Middle Income Educated Slightly Less than Cluster C
E Low Income
Very Low Level of Literacy
The SEC divides the population in five segments starting from A to E, where A categorizes the highly educated and high income earners holders the main target market of the Lux, and sequentially in descending order E categorizes the opposite.
LUX is not a highly expensive but an affordable product. That is why the company targets urban and sub urban upper middle and middle class people who are the second highest population of segment of the country. From the segmentation of customer according to SEC they target category A, B and C, because they are assumed to be financially well-off and can afford to buy LUX.
Socio Economic Clusters
A High Income Income High Level of Education Education
B Upper Middle Level Income Educated Slightly Less than Cluster A
C Mid Level Income Educated Slightly Less than Cluster B
Unilever Pakistan Ltd obtained a good position in the buyers’ mind through better product attributes, price and quality, offering the product in a different way than the competitors do. The company offers improved quality of products in the industry at an affordable price with high branding, which ultimately helps to position the product in the buyers’ mind as the best quality beauty soap. The market share of the company in the beauty soap industry is somewhere around 52%.Since in the beauty soap industry all products are of same price Unilever cannot provide its consumers with better price but it is in a great position in reference with its packaging, fragrances and product designing. It states that though in comparison to its competitors the pricing of LUX is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for LUX, for which it the market leader in the industry.
LUX is an internationally renowned beauty soap brand of Unilever. Though manufactured in Pakistan for the local market by Unilever Pakistan Ltd, as an international brand, it maintains an international quality for the product. Formula given by Research and Development departments in foreign countries, LUX is produced in Pakistan from imported raw materials like sodium soap, glycerol and different extracts according to flavors, coming from Unilever plants situated abroad. LUX is offered in Pakistan in six different flavors which are: LUX Energizing Honey, LUX Golden Glow, LUX Nature Pure, LUX Orchid Touch, LUX Almond Delight and LUX Aqua Sparkle.
Taking into account the convenience of its customers, the company manufactures all flavors of LUX in three different sizes, 40gm, 80gm and 120gm.
Though Unilever Pakistan gives its LUX customers a lot in terms of the product itself, it cannot provide a better pricing. This is due to some constraints in the beauty soap industry. Beauty soap is a product with a vulnerable demand in Pakistan. A change in price has a high risk of creating price war among the rivals which will eventually cause a loss of profit. Its prices are almost equal to its competitor. Company carries out research on competitors’ price and brand loyalty when it feels extreme necessaity of chaging price. The brand loyalty test is an exploratory research which is known as Brand Health Check-Up (BHCU).
Unilever Pakistan Ltd. has a huge distribution channel for LUX all over the country as its sales reach more than 10 million pieces a year. The company has six huge warehouses, one in each division of Pakistan. The company does not use its own fleet of transport for distributing its product. However, it has outsourced its distribution process to various third party distributors, exclusively dedicated to Unilever Pakistan Ltd. These distributors then supply the product all over Pakistan to a huge number of retailers. Even though LUX targets the urban and sub urban middle and upper middle class people they are distributing their products all over Pakistan because of a recent increase in demand of its product to all segments of the population.
Unilever Pakistan undertakes huge promotional activities to promote LUX which has topped the beauty soap industry of Pakistan. It spends almost 20% to 25% of its Net Proceeds from Sales (NPC) of LUX for promotional activities for LUX. It’s certain annual promotional campaigns like LUX Superstar and LUX Annual Style Awards has made the product a part of the glamour world. Since the 1930s, over 400 of the world’s most stunning and sensuous women have been proudly associated with Lux advertisements. They do not only promote LUX in Pakistan for the beauty conscious females, it also promotes the brand
for males and the company proved that, by including world famous male celebrity Shahrukh Khan and Shan for their advertising campaign. Unilever Pakistan Ltd spends a huge amount of money for promoting LUX through TV commercials, newspaper advertisements and billboards. Moreover it also undertakes small promotional campaigns at different schools, colleges, universities and recreational parks with winners of its Zonal Beauty Contests. Till now promotional activities of LUX has always been successful which has made it a household common name and helped it reach almost one billion taka sale value in the year 2004. Lux has been widely advertised in Pakistan ever since the brand was introduced. Pakistani models including Reema Khan, Meera, Aaminah Haq, Babra sharif and various other leading models and actresses have been "Lux models" from time to time. Lux remains the leading soap brand in Pakistan, representing the stylish class of Pakistan. Things started with a TV show called Lux Style Ki Duniya, now with the country's leading models and actors taking part in the annual Lux Style Awards every year. Ali Zafar the famous Pakistani Singer has become the first male model for Lux.